RBI Ban Hearing in 2 Days - What Indian Crypto Exchanges Are Expecting

The Indian supreme court will hear all petitions against the crypto banking ban by the Reserve Bank of India on Tuesday. News.Bitcoin.com talked to the CEOs of several Indian exchanges to find out what they are expecting from the hearing, trader sentiment, their exchanges’ current trading volumes, and how they see the court’s ruling affecting the crypto community.

The Beginning of the Journey

All eyes in the Indian crypto community are on the supreme court (SC) hearing on Tuesday, September 11, when all petitions related to the crypto banking ban by the Reserve Bank of India (RBI) will be heard. The country’s central bank issued a circular on April 6, banning banks from providing services to crypto businesses.

In response to the ban, a number of crypto exchanges operating in India have come up with methods to allow users to continue to deposit and withdraw Indian rupees. Among them are Wazirx, Instashift, and Coindcx exchanges which offer services based on the exchange-escrowed peer-to-peer (P2P) model.

Wazirx’s CEO, Nischal Shetty, shared with news.Bitcoin.com:

The SC hearing is not the end of the road but the beginning of the crypto journey in India…If the outcome is positive then it will definitely boost trading volumes. If the outcome is negative then I don’t think there would be much impact on the existing trading volumes.

Rahul Chitale, CEO of Instashift, told news.Bitcoin.com that “The ruling will surely have some bearing and the SC’s views will shape a lot of the regulatory thinking, but it’s unlikely to have an immediate tactical impact.” Citing that similar regulatory hurdles are seen globally, he described:

Crypto will continue to thrive regardless of the government view, like we have seen worldwide. Any ruling which forces the government to precipitate taking a view on this will only benefit crypto in India in the long run.

Sumit Gupta, CEO of Coindcx, explained to news.Bitcoin.com that “All Indian exchanges and crypto traders are eyeing the SC ruling.” In the long run, however, he believes that “Indian traders will eventually find ways to invest in cryptocurrencies via some innovative channels.” Emphasizing that “a negative ruling will just shift users to P2P trading platforms,” he asserted:

A positive ruling will boost crypto trade in the Indian market like we have seen in Q3 of 2017 and we will see lakhs of new users joining exchange platforms and volumes can shoot up even higher than it was before in the next bullish run.

Trading Volumes Rise Amid RBI Ban

Despite the banking ban, Shetty revealed that trading has been increasing on Wazirx, largely due to the increase in popularity of the exchange-escrowed P2P service. “Our trading volumes have been growing every week,” he said. “We were pleasantly surprised and overwhelmed by the way users have acclimatised themselves to P2P.”

For Instashift, Chitale described that “since the last set of RBI related developments in the past couple of months, we have continued to see strong 20-25% growth in trading volumes month on month over the last 2 quarters of our operation,” adding:

There is a lot of trader money still parked on the sidelines, and we continue to see a lot of it return back to the market, even in spite of the current downturn in nearly all major coins.

Gupta is also seeing a rise in trading volumes on Coindcx “due to its crypto-crypto nature.” However, he clarified that in general “that’s not the case,” elaborating that “Most of the Indian crypto investors are either hodling or trading rarely and hence the decline in overall volumes across exchanges. We observed that many people are also waiting to hear the SC verdict before they invest as this is also going to move crypto prices in India.”

Sathvik Vishwanath, CEO of one of India’s largest crypto exchanges, Unocoin, recently shared a similar sentiment with news.Bitcoin.com. He revealed that on his exchange, “The volumes have significantly come down as this [RBI’s ban] is not only restricting the new users joining the platform but it is also hurting the sentiments of the present users.” Unocoin currently does not offer P2P trading.

What Exchanges Are Expecting from the Ruling

Regardless of the outcome of the supreme court’s hearing, “It’s business as usual for us at Instashift,” according to Chitale. He added that “Our users are mostly retail investors who are into it for the long run, and while trading volumes may fluctuate up or down…we don’t see investor demand diminishing in the shorter timeframe.”

Wazirx is also prepared for whichever direction the ruling may take. If a stay order is granted on the RBI ban, “we’ll immediately resume bank deposits and withdrawals for all our users,” Shetty confirmed, emphasizing that, otherwise, Wazirx’s P2P solution “is already working great for all the users in India.” He further detailed:

Crypto has now reached a stage where everyone has started taking it seriously in India and the majority of the young generation sees crypto as a way to invest their money…I’m banking on the SC releasing a directive asking the government to lay out regulations for crypto in India as that would enable every Indian to trade safely in crypto in the future.

Sharing the sentiment, Chitale explained, “We are hopeful that the ruling will cause the government to prioritize its stand and clarity on a number of aspects of crypto,” such as regarding “taxation, classification, resolve any duality in state/center views, and so on.” He reiterated that “In short, this can only lead to clarity. Any clarity will lead to trader and investor confidence thus boosting the overall market.”

Citing that “as an asset class, ‘new money’ into crypto will come on the merit of crypto and other macro factors (like capital controls, taxation etc),” he concluded that “Broadly, we don’t expect trader and retail investor sentiment to diminish in that regard.”

Similarly, Gupta confirmed that Coindcx is “already prepared for the worst and have backup plans no matter which way the ruling swings.” Nonetheless, he said:

We are hopeful and believe that the government’s careful evaluation of the blockchain and cryptocurrency space will bring out a positive ruling that protects the interests of Indian crypto traders and investors. However I strongly feel that this space will eventually get regulated in India and we will see India as one of the global leaders in the blockchain space in the next 3-4 years.

What do you think the supreme court will do and how will the ruling affect the crypto community? Let us know in the comments section below.

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Kevin Helms

A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography.

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